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Income Tax Appellate Tribunal, Bengaluru, has been
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ITA No. 75 of 2020 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH DAY OF JANUARY, 2023 PRESENT THE HON'BLE MR JUSTICE P.S.DINESH KUMAR AND THE HON'BLE MR JUSTICE G BASAVARAJA INCOME TAX APPEAL NO.75 OF 2020 BETWEEN: EURAOMER GARUDA RESORTS (INDIA) PVT. LTD. NO.78/1, KR ROAD, BASVANAGUDI, BENGALURU 560004. …APPELLANT (BY SRI. G SHIVADASS, SR. ADVOCATE FOR SMT. JYOTHI A, ADVOCATE) AND: 1. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 2(1)(2), BANGALORE. 2. THE COMMISSIONER OF INCOME TAX (APPEALS), BANGALORE -2, 80 FEET ROAD, BMTC BUILDING, KORAMANGALA, BANGALORE 560095 …RESPONDENTS (BY SRI. DILIP M., STANDING COUNSEL FOR SRI. K.V.ARAVIND, SR. STANDING COUNSEL) Digitally signed by RAMYA D Location: High Court of Karnataka
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ITA No. 75 of 2020
THIS INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 12/07/2019 PASSED IN ITA NO.2755/BANG/2017, FOR THE ASSESSMENT YEAR 2013-2014. PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE AND ETC.
THIS APPEAL, COMING ON FOR HEARING, THIS DAY, THE COURT DELIVERED THE FOLLOWING: JUDGMENT
This appeal by the assessee challenging the order dated 12.07.2019 in ITA No.2755/Bang/2017 passed by the Income Tax Appellate Tribunal, Bengaluru, has been admitted to consider the following question of law: "Whether the finding recorded by the Tribunal that the assessee is not entitled to allowance in respect of consultancy fees paid by them, is perverse in the state of evidence on record?
Heard Shri.G.Shivadass, learned Senior Advocate for appellant and Shri.M.Dilip, for the respondent/Revenue.
The assessee’s case is, he has entered into an agreement dated 27.08.2004 with one Smt.Sumalatha Ambarish for the services which she is required to render
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ITA No. 75 of 2020 to the assessee. In terms of said agreement, assessee has been making regular payment to Smt.Sumalatha Ambarish. The assessee has been claiming deduction of the said payments as expenditures from Assessment Year (for short 'AY') 2005-06. Said deductions have been allowed successfully from AY 2005-06 to 2012-13.
For the AY 2013-14 the Assessing Officer (for short ‘AO’) disallowed the payments made to Smt.Sumalatha Ambarish. The Commissioner of Income Tax (Appeals) (for short 'CIT(A)') and Income Tax Appellate Tribunal (for short 'ITAT') also confirmed the said order.
Shri.Shivadass submitted that payments made to Smt.Sumalatha Ambarish are based on the agreement noted above. From the AY 2005-06, the deductions have been allowed by the ITAT. However, the ITAT has dismissed the appeal erroneously. Accordingly, he prayed for allowing this appeal.
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ITA No. 75 of 2020
Shri.Dilip submitted that whether the expenses were allowed in the previous years, is a matter of fact and as such he does not readily have the details of the same.
We have carefully considered the rival contentions of both parties and perused the records.
In paragraph 15 of the ITAT’s order it has recorded that assessee had contended that the expenses were allowed by the AO in the past. A copy of the agreement dated 27.08.2004 has been annexed to this appeal as Annexure-D.
Shri.Shivadass submitted that said document was also placed before the ITAT, but the same has not been considered. In paragraph 17 of its order, the ITAT has recorded that before the Tribunal also no evidence was placed to prompt the Tribunal to remand the matter.
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ITA No. 75 of 2020
If the expenses were allowed in the previous years, ITAT was required to examine the matter on facts and come to the final conclusion. It has recorded that no evidence was laid before the Tribunal, whereas it is asserted by the learned Senior Advocate that agreement was placed before the Tribunal.
In the facts and circumstances of the case, we are of the view that assessee must have an opportunity to demonstrate before the Tribunal that the expenses were allowed in the past. Hence, the following: ORDER (1) Appeal is allowed. (2) The order dated 12.07.2019 in ITA No.2755/Bang/2017 passed by the Income Tax Appellate Tribunal, Bengaluru, is set aside.
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ITA No. 75 of 2020 (3) Matter is remanded to the file of Income Tax Appellate Tribunal for fresh consideration in accordance with law. (4) Assessee shall be at liberty to rely upon the documents, which were already placed before the ITAT. (5) All contentions of both parties are kept open. (6) Since matter is remitted to the ITAT for fresh consideration, question of law is not answered.
No costs. Sd/- JUDGE Sd/- JUDGE DR List No.: 1 Sl. No.: 80